savage

PROVIDENCE — A Superior Court judge yesterday approved the choice of a global accounting firm to review operations at Landmark Medical Center, and ultimately, to help find a merger partner for the financially ailing Woonsocket hospital.

Judge Michael A. Silverstein authorized the hiring of a four-person team from the health-care practices division of PricewaterhouseCoopers LLP to help a Pawtucket lawyer oversee the hospital as they seek to ally it with another institution.

On June 26, Silverstein appointed Jonathan N. Savage, of Shechtman Halperin & Savage, temporary special master of Landmark. In a four-page order signed yesterday, Silverstein made permanent Savage’s appointment.

State officials involved in the Landmark matter supported the choice of PricewaterhouseCoopers.

“I think the judge did a very thorough and careful review,” said Dr. David R. Gifford, director of the state Department of Health. “We are very comfortable with his choice of Pricewaterhouse[Coopers].”

A spokesman for the attorney general’s office concurred.

“Attorney General Lynch thinks getting Landmark on a path toward solvency and profitability is the most urgent health-care issue and one of the most pressing economic issues on the table in Rhode Island. Attorney General Lynch thinks this is a very good choice.”

According to a letter released yesterday by Savage, Pricewaterhouse will assist him in evaluating the hospital’s operations and leadership structure.

It is no stranger to Landmark, according to a letter from Pricewaterhouse released yesterday by Savage.

In March 2007, the company was hired to review Landmark’s operations after the hospital violated a covenant of its bond issues.

Landmark is due to make a $1.3-million payment Oct. 1 on a bond issue that dates to 1993. Secured through the Rhode Island Health and Educational Building Corporation, that bond was refinanced in 2005. There is $12.5 million outstanding on that bond, according to the corporation’s executive director.

Part of Pricewaterhouse’s job will be to determine what progress the hospital has made on implementing changes the evaluator suggested at that time.

Yesterday, Savage said he was unsure how much Pricewaterhouse was paid for this work.

A letter sent by Pricewaterhouse to Savage outlining the work it will do now lists only ranges for hourly fees paid to workers assigned to the Landmark project. The duties start with associates, who may be paid $200 to $230 hourly, up to partners who are paid $545 to $640 hourly.

Pricewaterhouse will also work to identify additional hospital revenues. In addition, the company will help Landmark streamline operations to improve the bottom line.

The primary focus will be on helping Savage find a merger partner for Landmark.

“You always want to look at ways to do things more efficiently,” Gifford said. “[But] this really requires a strategic alliance with another hospital or hospital system.”

Landmark spokesman Bill Fischer welcomed the judge’s decision.

“From the hospital’s perspective, I think we’re in pretty good hands,” said Fischer, who said Pricewaterhouse has a “national network” of contacts in the health-care industry to assist Savage.

The special master also welcomed the help for his firm, which has a team of several lawyers and legal assistants working on Landmark, and at least one representative is at the hospital every day.

“We have a lot of experience running business; we now feel we have a national expertise component in health care,” Savage said. “I think they’re an excellent choice.”

Silverstein reviewed 27 individuals or entities potentially capable of handling the special master job, ultimately interviewing five in conjunction with officials from the attorney general’s office and the state Department of Health.

Landmark petitioned the court late last month to clear the way for a potential merger with another hospital. The Woonsocket facility has been losing money for many years and at the end of the last fiscal year was $7.2 million in debt.

Savage has been functioning as the hospital’s president, chief executive officer and chairman of the board, deciding on all expenditures, hiring and other issues.

Gary Gaube, the hospital’s chief executive officer, submitted his resignation on Monday. Gaube, 56, will leave at year’s end.

pgrimald@projo.com